Olsen v Sterling Crown Pty Ltd
[2008] FMCA 1392
•31 October 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| OLSEN v STERLING CROWN PTY LTD | [2008] FMCA 1392 |
| INDUSTRIAL LAW – Records relating to employees – contravention of requirement to produce records for inspection – admitted contraventions – penalty – factors for consideration – whether multiple contraventions – effect of payment of infringement notice – whether infringement notice constituted prior contravention – whether contraventions distinct or arising from single course of conduct – different requests at different times for different records for different periods for different people – whether size of corporation and financial resources relevant factor – whether co-operation with regulatory authorities or realisation of the inevitable. EVIDENCE – Evidence of facts relied upon in penalty proceedings – whether evidence to be on affidavit. |
| Building and Construction Industry Improvement Act 2005 (Cth) Crimes Act 1914 (Cth), s.4AA Evidence Act 1995 (Cth), s.59 Federal Magistrates Act 1999 (Cth), ss.3, 14 and 42 Federal Magistrates Court Rules 2001 (Cth), rr.1.03 and 4.05(1) Trade Practices Act 1975 (Cth), ss.45, 45A and 76 Workplace Relations Act 1996 (Cth), ss.3(a)(c)(f)(i) and (k), 4(1),169(1), 718 and 846(2)(g)(ii) Workplace Relations Regulations 2006 (Cth), Chapter 2, regs.14.3(2), 14.4, 14.5, 19.1, 19.18, (3)(b) and (5), 19.8(1), 19.44, 19.46(1) and 19.51(d) Workplace Relations Regulations 1996 (Cth), reg.131L(1) |
| ACCC v ABB Transmission and Distribution Limited (No.2) (2002) 190 ALR 169; [2002] FCA 559 Carr v CEPU & Anor [2007] FMCA 1526 Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 |
| JD Heydon, Trade Practices Law (Vol.2) (Sydney: Thomson Law Book Co) |
| Applicant: | CHELSEA IRENE OLSEN |
| Respondent: | STERLING CROWN PTY LTD |
| File Number: | PEG 125 OF 2008 |
| Judgment of: | Lucev FM |
| Hearing date: | 7 October 2008 |
| Date of Last Submission: | 7 October 2008 |
| Delivered at: | Perth |
| Delivered on: | 31 October 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr P Macliver |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondent: | Mr S Singh |
| Solicitors for the Respondent: | SS Chohaan |
DECLARATIONS AND ORDERS
The Court declares that the respondent contravened regulation 19.18 of Part 19 of Chapter 2 of the Workplace Relations Regulations 2006 (Cth) by failing to make available the records the subject of a written request by the applicant on 18 February 2008 (“First Contravention”).
The Court declares that the respondent contravened regulation 19.18 of Part 19 of Chapter 2 of the Workplace Relations Regulations 2006 (Cth) by failing to make available the records the subject of a written request by the applicant on 4 March 2008 (“Second Contravention”).
The Court orders that in respect of the First Contravention the respondent pay a penalty of $2,250.
The Court orders that in respect of the Second Contravention the respondent pay a penalty of $2,250.
The Court orders that payment of the penalties imposed in Orders (3) and (4) above be made by 4.00pm on 1 December 2008 to the Consolidated Revenue Fund.
| FEDERAL MAGISTRATES PERTH |
PEG 125 of 2008
| CHELSEA IRENE OLSEN |
Applicant
And
| STERLING CROWN PTY LTD |
Respondent
REASONS FOR JUDGMENT
Introduction
“Partners for Hair” is a hairdressing business run by the respondent at the Dog Swamp Shopping Centre in the Perth suburb of Yokine.[1]
[1] “the Business”.
The respondent did not provide records relating to employees of the Business upon request made by the applicant, a workplace inspector, employed by the Workplace Ombudsman. The failure to provide records constituted a contravention of Commonwealth workplace relations laws which is now admitted by the respondent.
Issues
The principal issue now before the Court is what penalty ought to be imposed upon the respondent for the admitted contraventions, and whether there is one contravention or two contraventions.
Application and Response
By the time of the hearing of this matter the applicant only sought a declaration or declarations of contravention of the relevant regulations, and orders for penalties payable to the Commonwealth (or the Consolidated Revenue Fund) to be imposed.
The relief sought by the applicant at hearing was not opposed by the respondent, save that there was disagreement as to:
a)whether there was one contravention or two contraventions; and
b)the quantum of any penalty to be imposed.
Factual background
Applicant’s evidence
The evidence for the applicant is in her affidavit affirmed on 8 September 2008.[2] The applicant’s evidence was not challenged by the respondent.
[2] “Olsen’s Affidavit”.
On 22 May 2007 Ms Sri Handayani, a former employee of the respondent, complained to the Workplace Ombudsman about the underpayment of wages by the respondent.[3]
[3] Olsen’s Affidavit, para.7 and Annexure CIO-4.
The respondent was notified of the claim by letter on 19 August 2007 from the Workplace Ombudsman, to which no response was received.[4] A further letter dated 17 September 2007 was sent to the respondent advising that the claim was being referred for investigation.[5] The investigation was not allocated to the applicant until 11 January 2008.[6] The evidence discloses no reason for the delay in allocating the investigation. The applicant wrote to the respondent on 14 January 2008 advising of an investigation into the former employee’s claim and requesting records, specifically:
[4] Olsen’s Affidavit, paras.8-9.
[5] Olsen’s Affidavit, para.10.
[6] Olsen’s Affidavit, para.11.
“All time records relevant to Ms Sri Handayani’s employment between October 2006 and April 2007;
wage records relevant to Ms Handayani’s employment between October 2006 and April 2007;
evidence of superannuation paid on behalf of Ms Handayani.”[7]
The records were requested to be provided by 29 January 2008.[8] The request was contained in a letter headed “Notification of investigation”. Attached to the “Notification of investigation” letter was a “REQUEST FOR RECORDS Pursuant to Regulation 19.18 of Chapter 2 of the Workplace Relations Regulations 2006”.[9] The 14 January 2008 Request for Records sought that records be produced for inspection to the applicant:
“…relating to the employment of Ms Sri Handayani, by the Director, Soraya Binit Habib Shah of Stirling [sic] Crown Pty Ltd, employed at Shop 6, Dogswamp [sic][10] Shopping Centre, Wanneroo Road, Yokine, WA, including, in particular:
All time and wages records for the period October 2006 and April 2007 required to be kept under Part 19 of Chapter 2 of the Regulationsm [sic], including copies of the following records that relate to Ms Sri Handayani:
1. All time records relevant to the duration of Ms Handayani’s employment between October 2006 and April 2007; and
2. All wage records relevant to the duration of Ms Sri Handayani’s employment between October 2006 and April 2007.”[11]
The records were to be produced by posting them to the applicant at a nominated address “within 14 days of receiving this request.”[12]
[7] Olsen’s Affidavit, Annexure CIO-7.
[8] Olsen’s Affidavit, Annexure CIO-7.
[9] “WR Regulations”; Olsen’s Affidavit, Annexure CIO-7 (“14 January 2008 Request for Records”).
[10] “Dog Swamp” is the correct name. The name derives from the nearby swamp which used to be known as “Native Dog Swamp”. That name was referrable to nearby “Yokine Hill”, “yokine” being an Aboriginal word for native dog. See Olsen’s Affidavit, Annexure CIO-7.
[12] Olsen’s Affidavit, Annexure CIO-7; see also WR Regulations, ch.2, reg.19.18(3)(b).
Chapter 2 reg.19.18 of the WR Regulations provides as follows:
Inspection and copying of a record
(1) An employer must make a copy of a record available, in accordance with subregulations (2) and (3), on request by:
(a) the employee, or the former employee, to whom the record relates; or
(b) a workplace inspector.
Note Divisions 4 and 5 of Part 15 of the Act deal with a registered organisation's right to inspect records in relation to employment.
(2) The employer must make the copy available in a legible form in the English language to the person making the request for inspection and copying.
(3) The employer must make the copy available:
(a) if the request is from an employee or former employee and the record is kept at the premises where the employee works or worked -- within 3 business days at those premises or by posting a copy of the record to the employee or former employee within 14 days of receiving the request; or
(b) if the request is from a workplace inspector -- within 3 business days at the employer's business premises or by posting or faxing a copy of the record to the workplace inspector within 14 days of receiving the request.
(4) Strict liability applies to the physical elements in subregulations (1), (2) and (3).
Note For strict liability, see section 6.1 of the Criminal Code.
(5) Subregulation (1) is a civil remedy provision.
Note Part 14 of this Chapter sets out provisions dealing with contraventions of civil remedy provisions.
The 14 January 2008 Request for Records was not responded to by the respondent within the specified time. Enquiries were then made to the manager of the Business, which led to a bookkeeper,[13] who was telephoned by the Applicant on three occasions in attempts to follow up the requests for records. On 18 February 2008 the bookkeeper telephoned the applicant and said that the records were available.[14]
[13] Initially described as an “accountant”: Olsen’s Affidavit, para.15. There seems to be no dispute that the person concerned was a bookkeeper: see Applicant’s Submissions on Penalty, para.5.5.6(ii); Respondent’s Submissions on Penalty, para.2.
[14] Olsen’s Affidavit, paras.15-18.
On 18 February 2008 the applicant, together with another workplace inspector, attended the Business premises at the Dog Swamp Shopping Centre. The applicant delivered to the manager of the Business an infringement notice No. 1652 for failure to comply with the 14 January 2008 Request for Records within the specified timeframe.[15] The infringement penalty was paid on 17 March 2008.[16]
[15] Olsen’s Affidavit, paras.18-19 and Annexure CIO-13; WR Regulations ch.2 reg.19.46(1).
[16] Olsen’s Affidavit, para.24.
Whilst at the Business on 18 February 2008 the applicant gave the respondent a further request for records.[17] The 18 February 2008 Request for Records related to a state-wide audit of the hairdressing and beauty industry which was being undertaken by the Workplace Ombudsman.[18] The 18 February 2008 Request for Records sought the production for inspection by the applicant of:
“…records relating to the employment of all employees employed during 1 October 2007 to 14 October 2007 of Stirling [sic] Crown Pty Ltd, employed at Shop 6, Dogswamp [sic] Shopping Centre, Wanneroo Road, Yokine, WA, including, in particular:
All time and wages records for the period 1 October 2007 to 14 October 2007 required to be kept under Part 19 of Chapter 2 of the Regulations, including copies of the following records that relate to all employees employed during the abovementioned period:
1. All time records most relevant to the period 1 October 2007 to 14 October 2007 for all employees employed by Stirling [sic] Crown Pty Ltd;
2. All wage records most relevant to the period 1 October 2007 to 14 October 2007 for all employees employed by Stirling [sic] Crown Pty Ltd.”[19]
The records were to be produced by posting copies to the applicant within 14 days of receipt of the 18 February 2008 Request for Records.[20]
[17] Olsen’s Affidavit, para.19 (“18 February 2008 Request for Records”).
[18] Olsen’s Affidavit, paras.14 and 19.
[19] Olsen’s Affidavit, Annexure CIO-14.
[20] Olsen’s Affidavit, Annexure CIO-14; WR Regulations ch.2, reg 19.18(3)(b).
On 20 February 2008 the applicant emailed the respondent’s bookkeeper querying whether the respondent intended to provide the records relating to the 14 January 2008 Request for Records in respect of which the infringement penalty had been imposed.[21] On 25 February 2008 the respondent’s bookkeeper responded saying that “All records that you have requested will be been [sic] posted to you today.”[22]
[21] Olsen’s Affidavit, para.20.
[22] Olsen’s Affidavit, para.21 and Annexure CIO-15.
On 4 March 2008 the applicant issued to the respondent a further request for records required to investigate Ms Handayani’s claim.[23] That request was in precisely the same terms as the 14 January 2008 Request for Records.[24]
[23] Olsen’s Affidavit, para.22 and Annexure CIO-16 (“4 March 2008 Request for Records”).
[24] The terms of that request are set out at para.8 above.
The applicant telephoned the respondent’s bookkeeper on 18 March 2008 and enquired as to the whereabouts of the records requested. What then followed is as follows:
“… [the bookkeeper] replied in words to the effect ‘the records are all together in plastic sleeves ready to be posted. They were left to be posted a couple of weeks ago’. …[the bookkeeper] also said in words to the effect that ‘We have paid the infringement notice’. I asked …[the bookkeeper] ‘Would you prefer it if I picked up the records?’ …[the bookkeeper]said words to the effect of ‘No – they are at my home office, not at the salon. I will check up on the records.’ I asked …[the bookkeeper] in words to the effect “Please send them to me via express post.’”[25]
[25] Olsen’s Affidavit, para.25 and Annexure CIO-19. It is unnecessary to name the bookkeeper for the purposes of these Reasons for Judgment.
To the date of institution of these proceedings on 5 August 2008 there was no further attempt by the applicant to contact the respondent, nor any contact between the respondent and the applicant, and the
18 February 2008 Request for Records and the 4 March 2008 Request for Records were not complied with.[26]
[26] Olsen’s Affidavit, paras.25 and 26 and Annexure CIO-19.
Ms Handayani contacted the applicant on 23 May 2008 indicating that she wished to withdraw the claim that she had made, a request which was later (on 14 August 2008) confirmed in writing.[27]
[27] Olsen’s Affidavit, paras.27 and 30 and Annexure CIO-22.
The applicant ceased employment with the Workplace Ombudsman on 5 September 2008.
These proceedings were commenced by application and statement of claim on 5 August 2008. There was a first court date on 29 August 2008 at which the respondent was ordered to file, a by then overdue, response by 12 September 2008. The application was also listed for hearing on 7 October 2008 at the first court date.
On 9 September 2008 the Respondent provided the records requested except for records as to the times worked by Ms Handayani.[28]
[28] Applicant’s Submissions on Penalty, para.1.5; Transcript at 7.
The respondent filed a response on 25 September 2008, some 13 days after the time specified in the Court’s Order of 29 August 2008, and 12 days before the hearing. The response consented to the declarations now sought and orders for the imposition of a penalty. There was no agreement as to the quantum of penalty.
Respondent’s evidence
Contrary to r.4.05(1) of the Federal Magistrates Court Rules 2001 (Cth)[29] the respondent did not file an affidavit with the response.
[29] “FMC Rules”.
On 3 October 2008 the respondent filed an affidavit from the solicitor acting for the respondent. The respondent did not seek to rely upon that affidavit at hearing, but, in any event, the only operative or relevant paragraph, of four lines, was arguably inadmissible hearsay about information given to the solicitor by the respondent’s bookkeeper.[30]
[30] Affidavit of Sobaran Singh, affirmed 3 October 2008, para. 2; Evidence Act 1995 (Cth), s.59.
The respondent filed, just five minutes before the hearing was due to commence, the Respondent’s Submissions on Penalty. In large part the Respondent’s Submissions on Penalty made assertions of fact which were not otherwise before the Court in the form of affidavit evidence.
If, in a penalty hearing, a party proposes to rely on asserted facts, evidence of those facts must be placed on affidavit and filed and served upon the opposing party in sufficient time to enable the opposing party to check the accuracy of the statements in the affidavit.[31] Where parties disagree about relevant facts or the appropriate penalty to be imposed, each fact or matter relating to the question of penalty must be established by sworn evidence unless some reason is advanced to satisfy the Court that particular facts should otherwise be accepted.[32] Although made in relation to pecuniary penalty proceedings under s.76 of the Trade Practices Act 1975 (Cth) the position is accurately summarised as follows:
“Although, since the proceedings are civil, the civil standard of proof applies, the gravity of the consequences leads the courts to require clear proof.”[33]
Clear proof requires either oral or affidavit evidence, if necessary tested by cross-examination. The informality of, and expedition in, proceedings mandated by the Federal Magistrates Act 1999 (Cth)[34] and FMC Rules[35] cannot be a substitute for proof of fact where the facts are disputed.
[31] TPC v Madad Pty Ltd (1979) 40 FLR 453 at 455 per Keely J (“Madad”).
[32] Madad at 455-457 per Keely J.
[33] JD Heydon, Trade Practices Law (Vol.2) (Sydney: Thomson Law Book Co) at para.18.250 (“Trade Practices Law”), including a reference to the nature of civil proceedings in CEEEIPPASU v ACCC (2007) 162 FCR 466; [2007] ATPR 42-177 at paras.19-28. See also Trade Practices Law at para.18.430 citing Madad and O’Neill v El Camino Autos Pty Ltd (1980) 42 FLR 350; [1980] ATPR 40-158 (“El Camino Autos”). In El Camino Autos, Madad was followed, and the desirability of the necessity to put evidence on affidavit emphasised: FLR at 36-37 per Lockhart J; ATPR at 42,235-42,236 per Lockhart J.
[34] “FM Act”.
[35] See FM Act, ss.3, 14 and 42; FMC Rules, r.1.03.
The Court has therefore only had regard to the assertions made in the respondent’s submissions to the extent that there is evidence of those assertions in the applicant’s evidence, or where the applicant has indicated that the assertions made are not disputed. On that basis, the Court can find as follows:
a)the sole director, secretary and shareholder of the respondent either resides, or spends a significant amount of time, outside of Australia, notwithstanding that the respondent’s registered office and principal place of business is listed as being at 2 St George’s Terrace in Perth;[36]
b)that the respondent engaged a bookkeeper to keep the records;[37]
c)the respondent did not have a system of any kind to ensure that proper records relating to employees were kept or able to be produced upon request;[38]
d)that applications for violence restraining orders were made against the respondent’s bookkeeper’s husband in January 2008 and April 2008, and a violence restraining order was issued against the husband by the Magistrates Court of Western Australia at Midland on 10 April 2008;[39]
e)no loss or damage of a monetary kind was suffered by reason of the failure to produce the records;[40]
f)the Business was a relatively small one employing one hairdresser and three apprentices;[41] and
g)admission of the contraventions by the respondent meant that a contested hearing was avoided.
[36] Olsen’s Affidavit, paras.4-6 and Annexures CIO-2 and CIO 3.
[37] Olsen’s Affidavit, paras.15-18 and 25.
[38] Transcript at 12.
[39] Copies of the violence restraining order applications and the violence restraining order were attached to the Respondent’s Submissions on Penalty.
[40] Applicant’s Submissions on Penalty, para.5.5.3(i).
[41] Applicant’s Submissions on Penalty, para.5.5.6(i).
In view of the:
a)failure of the respondent to file affidavit evidence with the response;
b)fact that when the respondent did file affidavit evidence, after having admitted the contraventions, that affidavit evidence was in very limited terms (restricted to one four line paragraph containing hearsay information about what the respondent’s solicitors were allegedly told by the bookkeeper) and was arguably inadmissible; and
c)respondent being aware of the ability to file evidence to establish facts in mitigation of penalty, but failing to file any evidence which was relied on,
the Court is not prepared to make factual findings in relation to various assertions made by the respondent including:
d)the extent to which it was the bookkeeper’s fault that the records were not produced (and to the extent relevant not kept to enable them to be produced);
e)the extent to which the bookkeeper’s personal circumstances might have resulted in her not attending to her duties, or her duties being affected by her personal circumstances; and
f)the extent to which the respondent has subsequently instituted a system of checks and balances to ensure that relevant records are properly kept and able to be produced on request in the future.
The Court is however prepared to make the following findings:
a)that the earlier infringement penalty was paid without the knowledge of the sole director, secretary and shareholder; and
b)that it was ultimately the fault of the respondent that the records were not produced upon request because the respondent had failed to ensure that there was a system in place to enable this to occur, a fact freely and properly conceded by Counsel immediately upon opening his submissions in respect of penalty on behalf of the respondent.[42]
Penalties
[42] Transcript at 12.
Quantum
A workplace inspector may apply to this Court for an order for a contravention of a civil remedy provision in the WR Regulations.[43] The Court may order a person who has contravened a civil remedy provision under the WR Regulations to pay a pecuniary penalty of up to the maximum penalty permissible under s.846(2)(g) of the Workplace Relations Act 1996 (Cth).[44] Section 846(2)(g) of the WR Act provides that the Governor-General may make regulations for civil penalties for contravention of the WR Regulations not exceeding 50 penalty units for a body corporate.[45]
[43] WR Regulations, ch.2, reg.14.3(2).
[44] “WR Act”; WR Regulations, ch.2, reg.14.4.
[45] WR Act, s.846(2)(g)(ii).
Section 4(1) of the WR Act defines “penalty unit” as having the meaning given by s.4AA of the Crimes Act 1914 (Cth), which defines “penalty unit” to be $110. Therefore, the Court can impose a maximum penalty of $5,500 for contravention of a civil remedy provision in the WR Regulations. Chapter 2, reg.19.8(1) of the WR Regulations is a civil remedy provision.[46]
[46] WR Regulations, ch.2, reg.19.18(5).
The quantum of penalty must have regard to any legislative change. Prior to the WR Regulations being enacted in their current form in 2006 the Workplace Relations Regulations1996 (Cth)[47] provided for a maximum penalty of $1,000 if an employer did not make a copy of a record available to an inspector in relation to an employee, other than an employee employed under an AWA.[48] The current penalty is more than five times the penalty applicable immediately prior to the enactment of the WR Regulations. That increase in penalties is entirely consistent with a general increase in penalties under the provisions of the WR Act in recent times.
[47] “1996 WR Regulations”.
[48] 1996 WR Regulations, reg.131L(1).
The Federal Court has suggested, against a background of increased penalties in the WR Act, that the imposition of civil penalties in industrial law proceedings is no longer to be approached with a light hand,[49] and that it might be appropriate for penalties under the WR Act to rise appreciably.[50] The more heavy handed approach applies particularly where breaches are serious, wilful and ongoing.[51]
[49] Finance Sector Union v Commonwealth Bank of Australia (2005) 224 ALR 467 at 487 per Merkel J; [2005] FCA 1847 at para.72 per Merkel J (“Commonwealth Bank”).
[50] Commonwealth Bank of Australia & Anor v Finance Sector Union (2007) 157 FCR 329 at 364 per Branson J; [2007] FCAFC 18 at para.192 per Branson J (“Commonwealth Bank Appeal”).
[51] Commonwealth Bank ALR at 487 per Merkel J; FCA at para.72 per Merkel J.
The approach suggested by the Federal Court has been followed by this Court on a number of occasions,[52] and subject to a proper consideration of relevant factors as to assessment of penalty, ought to be followed in this case.
[52] See Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at para.22 per Mowbray FM (“Harrington Corporation”); Flattery v The Italian Eatery Trading As Zeffirelli’s Pizza Restaurant (2007) 163 IR 14 at 21 per Mowbray FM; [2007] FMCA 9 at para.16 per Mowbray FM; Jones v Hanssen Pty Ltd [2008] FMCA 291 at paras.24-25 per Lucev FM (“Hanssen”).
Assessment of penalty – relevant factors
Based on a series of decided cases in the Federal Court and this Court[53] there does not appear to be a dispute about the relevant considerations for assessment of penalty, which are as follows:
[53] Including Construction, Forestry, Mining & Energy Union vCoal & Allied Operations Pty Ltd (No.2) (1999) 94 IR 231; [1999] FCA 1714 per Branson J at paras.7-8 (“Coal & Allied Operations”); Cotis v Pow Juice Pty Ltd [2007] FMCA 140 at para.49 per Lloyd-Jones FM (“Pow Juice”); Harrington Corporation at paras.19-22, 36-37, 50 and 59 per Mowbray FM; Cotis v Macpherson (2007) 169 IR 30 at 39 per Driver FM; [2007] FMCA 2060 at para.11 per Driver FM (“Macpherson”); Hanssen at para.6 per Lucev FM; Kelly v Fitzpatrick (2007) 166 IR 14 at 18 per Tracey J; [2007] FCA 1080 at para.14 per Tracey J (“Kelly”).
a)the nature and extent of the conduct which led to the contraventions;
b)the circumstances of the conduct (including deliberate defiance or disregard of the WR Act);
c)relevant record of civil penalty contraventions;
d)whether the contraventions are distinct or arise from a single course of conduct;
e)the consequences of the contravening conduct;
f)deterrence, both general and specific;
g)the objects of the WR Act;
h)the size and financial resources of the contravener;
i)co-operation with regulatory authorities;
j)the contravener’s contrition;
k)the size of the prescribed penalty, and any recent increases to that prescription; and
l)the totality principle.[54]
[54] The same factors have been adopted for penalty cases under the Building and Construction Industry Improvement Act 2005 (Cth): see Stuart-Mahoney v CFMEU [2008] FCA 1426 at para.40 per Tracey J, and the cases there referred to, namely Hadgkiss v Aldan (2007) 164 FCR 394 at 405 per Gilmour J; [2007] FCA 2068 at para.61 per Gilmour J (this case also involved contraventions of the WR Act); Furlong v AWU (2007) 162 IR 171 at 173-174 per Burchardt FM; [2007] FMCA 443 at paras.7-10; Carr v CEPU & Anor [2007] FMCA 1526 at paras.7-8 per Lucev FM (“Carr”); Cruse v CFMEU [2007] FMCA 1873 at para.71 per Burchardt FM.
The nature and extent of the conduct which led to the contraventions
[56] See para.20 above.
The nature of the conduct was a failure to do that which the law, the WR Regulations, prescribed must be done, that is to produce records on request by a workplace inspector. That failure must be considered in the context of the reason for the requirement to produce records, as set out below.[55] Any prolonged failure to produce must be serious. Here there was a prolonged failure to produce in respect of both the
18 February 2008Request for Records and the 4 March 2008 Request for Records. The failure, in respect of each request, was serious. Each failure was also extended, the records not being produced until
9 September 2008[56]which was:
a)more than six months after the 18 February 2008 Request for Records and 4 March 2008 Request for Records were made;
b)more than one month after this application was filed on 5 August 2008; and
c)after the first court date on 29 August 2008.
[55] See para.51 below.
The nature of the conduct was therefore serious, and its extent in time considerable.
The extent of the contravention in relation to the 4 March 2008 Request for Records (that is the records relating solely to
Ms Handayani) was not significant in scope. The same cannot be said of the failure to produce records in relation to the 18 February 2008 Request for Records which related to a state-wide compliance audit being conducted by the Workplace Ombudsman and which related to the relevant records for the whole of the Business (albeit a small business).
The circumstances of the conduct (including deliberate defiance or disregard of the WR Act)
The contravention occurred in circumstances where the respondent admits that it had no system in place to facilitate compliance with a request to produce records. The respondent did engage a bookkeeper to perform the task of keeping the relevant records and making them available for production, but the fact that the bookkeeper did not do so does not exculpate the respondent. The respondent admits that it had no system of checks and balances to ensure that the bookkeeper was performing the task. Furthermore, the business was a small business: one hairdresser, three apprentices, a bookkeeper (seemingly an independent contractor operating from premises outside of the respondent’s business premises), and the sole director, secretary and shareholder. In those circumstances maintenance of the relevant records in the form required by the WR Regulations, and their production, cannot be seen as an overly onerous undertaking.
The failure to produce did nothing to facilitate the investigation of:
a)the specific complaint made by Ms Handayani; and
b)the industry compliance audit being conducted by the Workplace Ombudsman.
Relevant record of civil penalty contraventions
The Court must consider whether the infringement penalty which was paid will affect any penalty imposed for the two subsequent admitted contraventions.
Chapter 2 reg.19.44 of the WR Regulations, clarifies the purpose of the infringement notice section in relation to legal liability by providing that:
Purpose of Part
(1) The purpose of this Part is to set up a system of infringement notices for alleged contraventions of infringement notice penalties as an alternative to the institution of proceedings.
(2) This Part does not:
(a) require an infringement notice to be issued to a person for an alleged contravention of an infringement notice penalty; or
(b) affect the liability of a person to proceedings for contravention of an infringement notice penalty if an infringement notice is not issued to the person for the alleged contravention; or
(c) prevent the issue of 2 or more infringement notices to a person for an alleged contravention; or
(d) affect the liability of a person to proceedings for contravention of an infringement notice penalty if the person does not comply with an infringement notice for the alleged contravention; or
(e) limit or otherwise affect the penalty that may be imposed by a court on a person for a contravention.
Regulation 19.51 of the WR Regulations provides that:
19.51 Effect of payment of penalty
If the infringement notice is not withdrawn, and the recipient pays the penalty stated in the notice:
(a) any liability of the recipient for the alleged contravention is discharged; and
(b) no proceedings may be brought against the recipient for the alleged contravention; and
(c) the recipient is not taken to have admitted guilt in respect of the alleged contravention; and
(d) the recipient is not taken to have been convicted of the contravention.
The applicant seeks to rely on the 14 January 2008 Request for Records in the following ways:
a)to show the deliberateness of the breach: alleging that the respondent was reckless in compliance with its obligations “…particularly given that the Respondent did not comply with an earlier request for documents in relation to Ms Handayani, for which it received and paid an infringement notice”;[57] and
b)to ensure compliance with minimum standards.[58]
[57] Applicant’s submissions para.5.5.7(i).
[58] Applicant’s submissions para.5.5.10(iii).
To have regard to the previous conduct of the respondent where an infringement notice was paid seems to contradict the stated purpose of the infringement notice section of the WR Regulations, and particularly the provisions in ch.2. reg.19.51(d) of the WR Regulations. If an infringement notice is paid, the recipient who paid the fine is not to be taken as having been convicted of a contravention. To treat the infringement penalty issued and paid in respect of the 14 January 2008 Request for Records as a prior contravention would be to treat the respondent as if they had been convicted of a contravention, contrary to ch.2 reg.19.51(2)(d) of the WR Regulations.
In the circumstances the respondent will be treated as a first time contravener.
Whether the contraventions are distinct or arise from a single course of conduct
Chapter 2 reg.14.5 of the WR Regulations entitled “Multiple contraventions of civil remedy provisions” provides that:
(1) This regulation applies if:
(a) a person commits 2 or more contraventions of a civil remedy provision of these Regulations; and
(b) each contravention relates to the same action or course of conduct of the person.
(2) The contraventions are taken, for these Regulations, to be a single contravention of the civil remedy provision.
(3) However, if:
(a) a penalty has been imposed on the person in relation to a contravention of a civil remedy provision relating to an action or course of conduct of the person; and
(b) the person subsequently commits a contravention of the civil remedy provision relating to the same action or course of conduct;
subregulation (2) does not apply to the contravention mentioned in paragraph (b).
Note The intention of subregulations (2) and (3) is thatmultiple contraventionsof a civil remedy provision, in relation to the same action or course of conduct, will be treated as a single contravention until a penalty is imposed on the person.
Multiple contraventions after that time, in relation to the same action or course of conduct, will be treated as a single, but separate, contravention of the civil remedy provision. If another penalty is imposed, subsequent contraventions will again be treated as a single, but separate, contravention of the civil remedy provision.
The respondent submits that the two contraventions form part of the “same cause of action”, and noted that there is some overlap in the documents requested from the applicant, and further submitted that there is a single breach of a civil remedy provision.[59]
[59] Transcript at 16; Respondent’s Submissions on Penalty, page 3.
The applicant submits that the two contraventions are distinct and separate and that the respondent ought not have the benefit of ch.2 reg.14.5 of the WR Regulations.
The Court notes that the 18 February 2008 Request for Records and the 4 March 2008 Request for Records related to different requests at different times for different records for different periods for different people. There was no overlap. Further, by the time the 4 March 2008 Request for Records was made the 18 February 2008 Request for Records contravention was essentially complete, 4 March 2008 being the 14th day following issuance of the 18 February 2008 Request for Records.
The Court therefore considers that the two admitted contraventions are not in respect of the same action or same course of conduct by the respondent, but distinct actions and distinct courses of conduct, and must be treated as two separate contraventions.
The consequences of the contravening conduct
The parties agree that there is no loss or damage per se involved in this matter. However, the fact of loss or damage must be adapted to its context. In this case, that context is the loss of, or damage to, the relevant statutory objective. That is, “conduct … [which] undermines the utility and effectiveness of a fundamental object”[60] of, in this case, the WR Act and WR Regulations. In this case, an employer must make a copy of the relevant employment record available to a workplace inspector in the prescribed manner.[61] That accords with the purpose of Part 19 of the WR Regulations which is to provide for “the inspection of records by workplace inspectors”.[62] Those provisions of the WR Regulations tie in with the purposes for which the powers of workplace inspectors can be exercised under s.169 of the WR Act, those purposes including determination of whether various industrial instruments and minimum standards and entitlements, and the requirements of the WR Act and WR Regulations themselves, are being observed.[63] Contravention of these provisions allows a workplace inspector to apply for a penalty or other remedy in relation to the contravention.[64] The provisions of ch.2, reg.19.18(1) of the WR Regulations go to the observance of entitlements of matters such as:
a)the provision of economically sustainable safety net minimum wages and conditions for persons whose employment is regulated by the WR Act;[65] and
b)ensuring compliance with minimum standards and industrial instruments through the provision of effective means for investigation and enforcement of employee entitlements.[66]
[60] Secretary, Department of Health & Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at para.56 per Flick J. See also Hanssen at para.29 per Lucev FM: “conduct … unchecked … might undermine some of the statutory objects and purposes of the WR Act.”
[61] WR Regulations, ch.2, reg.19.18.
[62] WR Regulations, ch.2, reg.19.1.
[63] WR Act, s.169(1).
[64] WR Act, s.718.
[65] WR Act, s.3(c).
[66] WR Act, s.3(f)(i).
Therefore, a breach of ch.2, reg.19.18(1) of the WR Regulations is ultimately conduct undermining the utility and effectiveness of a principal object of the WR Act.
Deterrence, both general and specific
Deterrence is a primary objective of imposing penalties: therefore, general and specific deterrence are significant considerations when determining the quantum of penalty.[67] Deterrence must be both specific and general: specific deterrence in this case relating to the need to deter the respondent from further contravention of the WR Regulations, with general deterrence referring to the need to deter others from contravening the WR Regulations, by showing the seriousness with which the Court considers the contravention.[68]
[67] Leighton Contractors & Anor v Construction, Forestry, Mining and Energy Union & Ors [2006] WASC 317 at para.74 per Le Miere J; Carr at para.29 per Lucev FM, applied in Hanssen at para.24 per Lucev FM.
[68] Carr at para.29 per Lucev FM, applied in Hanssen at para.24 per Lucev FM.
As indicated above,[69] the imposition of civil penalties in industrial law proceedings is no longer to be approached with a light hand, but it remains the case that penalties must be meaningful and consistent in light of other considerations to be taken into account when determining appropriate penalty.[70]
[69] See para.32 above.
[70] ACCC v IPN Operations Maintenance Loy Yang Pty Ltd (No.2) [2007] FCA 11 at para.66 per Young J; Carr at para.29 per Lucev FM, applied in Hanssen at para.24 per Lucev FM.
Having regard to:
a)the conduct resulting in the contraventions being ongoing over a significant period of time; and
b)there being no system in place to ensure proper records relating to employees were kept or able to be produced upon request, and that this was the fault of the respondent, and no evidence of the extent to which the respondent has subsequently instituted, if it has, a system of checks and balances to ensure proper record keeping,
the Court considers it appropriate to impose a penalty which recognises that this is a case in which there is a need for specific deterrence.
The Court accepts that general deterrence is an important and relevant consideration. Its application must however have regard to the evidence. There is evidence of a state-wide compliance audit in the hairdressing industry, but no, or no significant, evidence in these proceedings of a widespread compliance problem within the industry. Thus, whilst the Court accepts that the penalty should recognise the need for general deterrence of the conduct in question throughout the industry concerned, it is not necessary to impose a penalty reflecting a greater level of general deterrence than might ordinarily be the case.
The objects of the WR Act
The objects of the WR Act are discussed above in relation to the consequences of the contravening conduct.[71]
[71] See para.51 above.
The size and financial resources of the contravener
There appears to be no dispute that the Business is a small one,[72] employing one hairdresser and three apprentices, and engaging a bookkeeper.
[72] There is however no evidence of the size of the company (which is the respondent) behind the Business.
The applicant says that no reduction in the quantum of penalty should be afforded to the respondent because of the small size of the Business, citing Macpherson[73] and Kelly.[74] In Kelly the Federal Court said:
“The respondents have expressed contrition and have put in place mechanisms which are designed to ensure that there will be no repetition of the breaches which have led to the present proceeding. Specific deterrence does not, therefore, loom large as a consideration in determining penalty. It does not follow that the need for general deterrence may be disregarded. As Finkelstein J said in CPSU v Telstra Corporation Limited (2001) 108 IR 228 at 231: "even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law’s disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct ..." No less than large corporate employers, small businesses have an obligation to meet minimum employment standards and their employees, rightly, have an expectation that this will occur. When it does not it will, normally, be necessary to mark the failure by imposing an appropriate monetary sanction. Such a sanction "must be imposed at a meaningful level": see Australian Competition and Consumer Commission v ABB Transmission and Distribution Ltd [2001] ATPR 41-815 at [13].”[75]
[73] IR 41 per Driver FM; FMCA at para.16 per Driver FM.
[74] IR at 21 per Tracey J; FCA at para.28 per Tracey J.
[75] Kelly IR at 21 per Tracey J; FCA at para.28 per Tracey J.
In Macpherson this Court reiterated observations it had made in Rajagopalan v BM Sydney Building Materials Pty Ltd[76] where this Court said:
“Employers must not be left under the impression that because of their size or financial difficulty that they are able to breach an award. Obligations by employers for adherence to industrial instruments arise regardless of their size. Such a factor should be of limited relevance to the Court’s consideration of penalty.”[77]
[76] [2007] FMCA 1412 (“Rajagopalan”).
[77] Rajagopalan at para.27 per Driver FM.
The Court in Rajagopalan then went on to cite the final two sentences of the quote from CPSU, The Community and Public Sector Union v Telstra Corporation Limited[78] set out in the above extract from Kelly.[79]
[78] (2001) 108 IR 228; [2001] FCA 1364 (“CPSU v Telstra”)
[79] And wrongly attributing the statement to Tracey J in Kelly.
More recently in Longmire v Murray Clarke Enterprises Pty Ltd & Anor[80] the same quote from CPSU v Telstra is set out,[81] and then this Court’s judgment in Pow Juice is quoted:
“Difficulty in paying penalties should not prevent the Court from imposing penalties which are otherwise appropriate…If the circumstances require a substantial penalty to be imposed, the financial difficulty itself will not deter the imposition of a penalty.”[82]
[80] [2008] FMCA 1028 (“Murray Clarke Enterprises”).
[81] And once again wrongly attributed to Tracey J in Kelly rather than Finkelstein J in CPSU v Telstra: see Murray Clarke Enterprises at para.70 per Barnes FM.
[82] Pow Juice at para.68 per Lloyd-Jones FM quoted in Murray Clarke Enterprises at para.71 per Barnes FM.
The size and financial resources of a contravener are factors to be taken into consideration in determining penalty, that penalty to be determined having regard to all of the relevant circumstances of the case. Macpherson and Kelly are not authorities to the contrary. In Kelly the Federal Court expressly adopted as a relevant and applicable consideration the size of the business enterprise involved, following this Court’s judgment in Harrington Corporation.[83]
[83] Kelly IR at 18 per Tracey J; FCA at para.14 per Tracey J. In Harrington Corporation Mowbray FM specifically referred to the size of the company as a factor relevant to consideration, although in that case he found that there was no evidence of assistance before the Court on the size of the company: at para.36.
In Macpherson where reliance was placed upon Rajagopalan the size of the company was a factor, although there the Court said that it should be of limited relevance to the Court’s consideration of penalty.[84] Thus, in both the cases cited by the respondent the size of the corporation concerned has been taken into account as a factor.
[84] See para.60 above.
In Kelly the Federal Court did not disavow size as a factor to be considered in relation to penalty. What the Federal Court there said was:
a)regardless of size, corporate employers are obliged to meet minimum employment standards;
b)when corporate employers do not meet minimum employment standards it will be normal to impose an “appropriate” monetary sanction; and
c)the sanction must be at a meaningful level.
The size of the employer is relevant to a consideration of what the “appropriate” sanction is, and whether that sanction is at a meaningful level. Whether any reduction ought to be afforded to an employer by reason of the size of the corporation concerned is a matter for consideration having regard to the particular circumstances of each case. In ACCC v ABB Transmission and Distribution Limited (No.2)[85] the Federal Court in imposing penalties in relation to contraventions of ss.45 and 45A of the Trade Practices Act 1976 (Cth) specifically took account of:
a)the difference in size and scale of the operations of the offending corporations;
b)the fact that shares were tightly held in two of the companies which were private, whilst the third was a subsidiary of a large international public company; and
c)the size of the parent company of the subsidiary company,
in determining the penalties to be imposed.[86]
[85] (2002) 190 ALR 169; [2002] FCA 559 (“ABB Transmission (No.2)”).
[86] ABB Transmission(No.2) ALR at 180-181 per Finkelstein J; FCA at para.40 per Finkelstein J.
In ABB Transmission (No.2) the Federal Court went on to expressly find that:
“In determining the appropriate penalty it is also necessary to have regard to the capacity of the parties to bear the penalty.”[87]
[87] ABB Transmission(No.2) ALR at 181 per Finkelstein J; FCA at para.42 per Finkelstein J.
The Federal Court also took into account in setting penalty a concern that the size of the penalty would not affect one corporation’s ability to trade, observing that it would “be incongruous if a penalty for an anti-trust violation had an anti-competitive effect.”[88]
[88] ABB Transmission(No.2) ALR at 183 per Finkelstein J; FCA at para.50 per Finkelstein J.
It might be said that these were considerations within the case in relation to the so called “parity principle”. But in ABB Transmission (No.2) the Federal Court expressly found that the parity principle “should not prevent the court from carefully assessing the significance of a particular penalty for a particular corporation.”[89] It might also be said that those considerations are particular to contraventions of trade practices legislation involving abuse of market power where the size of the corporation might be of particular relevance.[90] But questions of power, and the power disparity between an employer and an employee, are relevant in this case. They are relevant because the purpose for maintaining employment records is to allow their inspection by workplace inspectors so as to facilitate compliance with industrial instruments and minimum employment standards.[91] The power disparity between an employer and an employee, possibly arising from the size and financial resources of the employer, has been recognised as a factor which may impact upon the negotiation of terms and conditions of employment.[92] If the size and financial resources of a corporation in relation to an abuse of market power are relevant, then the size and financial resources of an employer might also be relevant to an abuse of employment power which might be revealed by an inspection of employment records. Therefore the size and financial resources of the employer are relevant factors for consideration in this case.
[89] ABB Transmission(No.2) ALR at 181 per Finkelstein J; FCA at para.40 per Finkelstein J.
[90] ABB Transmission(No.2) ALR at 180-183 per Finkelstein J; FCA at paras.40-50. And see TPC v CSR Limited (1991) ATPR 41-076 where the size of the contravening company was held to be a relevant factor in assessing penalty: at 52,152 per French J; and where the contravening conduct was said to be that of a company “which describes itself as one of Australia’s biggest. In the ceiling materials market in Western Australia it is a behemoth. And its size and the size of its market share are elements in its market power which was in this case enhanced by the geographic isolation of the market and the associated barriers to new entrants.”: at 52,155 per French J. In Madad submissions were made as to the size of the defendant’s operations, and the Federal Court accepted that the defendant was “plainly not one of the Queensland’s largest manufacturing companies.” at page 459 per Keely J.
[91] See para.51 above.
[92] Balding v Ten Talents Pty Ltd (2007) 162 IR 17 at 30-31 per Lucev FM; [2007] FMCA 145 at paras.55-57 per Lucev FM, and the texts and cases there cited.
In ASC v Forem-Freeway Enterprises Pty Ltd & Ors[93] the Federal Court in a corporations matter was dealing with an application for a pecuniary penalty in relation to a failure to keep accounting records. The Federal Court took into account whether or not the individual concerned had the capacity to pay a substantial penalty.[94] The individual concerned was bankrupt, but any penalty would survive the bankruptcy, and the Federal Court observed that the bankrupt would emerge from the bankruptcy indebted to the Commonwealth, and that if he had no capacity to pay, the infliction of such a debt by way of penalty was “a somewhat pointless exercise.”[95] The Federal Court however took account of the fact that the individual concerned might come into funds in the future and might be able to pay a penalty at a future time, and therefore ordered that there be liberty to apply in relation to the imposition of a penalty.[96]
[93] (1999) 30 ACSR 339 (“Forem-Freeway Enterprises”).
[94] Forem-Freeway Enterprises at 351-352 per Madgwick J.
[95] Forem-Freeway Enterprises at 352 per Madgwick J.
[96] Forem-Freeway Enterprises at 352 per Madgwick J.
This Court has previously said that:
“There is an established principle in setting penalties for both individuals and corporations that regard is had to their financial position, and more particularly their capacity to pay.”[97]
[97] Carr at para.27 per Lucev FM and Hanssen at para.30 per Lucev FM, in both cases citing Forem-Freeway Enterprises and ABB Transmission (No.2).
There is nothing new in the size and financial resources of the employer (be it a corporation or otherwise) being considered in setting penalties in industrial law matters. In PKIU v Vista Paper Products Pty Ltd[98] the then Chief Justice of the Industrial Relations Court of Australia said:
“In determining what monetary penalty to impose on an offender it is usual for a court to take into account the offender’s capacity to pay. A monetary sum that would constitute a reasonable penalty to a person of average income might be unduly oppressive if imposed on an impecunious person.”[99]
[98] (1994) 127 ALR 673 (“Vista Paper Products”).
[99] Vista Paper Products at 686 per Wilcox CJ.
In Textile Clothing and Footwear Union of Australia v Lotus Cove Pty Ltd[100] the Federal Court as a factor in mitigation of penalty had regard to the fact that the employer respondent was a small enterprise upon whom the imposition of a large fine was likely to be oppressive.[101]
[100] [2004] FCA 43 (“Lotus Cove”).
[101] Lotus Cove at para.47 per Merkel J.
In Australian Nursing Federation v Alcheringa Hostel[102] the Federal Court had regard to the following:
“Alcheringa is a community-based non-profit organisation that has been in difficult financial straits for the last few years. It did not seek to reduce labour costs so as to increase the wealth of itself or any shareholders. Rather, it acted on a perception, real or otherwise, that it was essential for its financial survival for medication to be administered by persons other than Division 1 nurses. I have also borne in mind that a heavy financial penalty will divert already scarce resources from Alcheringa’s residents and the community it serves.”[103]
[102] (2004) 136 FCR 530; [2004] FCA 375 (“Alcheringa Hostel”).
[103] Alcheringa Hostel FCR at 545-546 per Ryan J; FCA at para.45(f) per Ryan J. In an occupational health and safety prosecution the New South Wales Chief Industrial Magistrate’s Court took account of the fact that the employer was “a large employer in NSW” in relation to the fact that it had no prior record: Southam v Petersville Limited (Trading as Australian United Foods) (1988) 24 IR 186 at 195 per Miller CIM.
As with cases under the trade practices legislation where the financial resources of a contravener are considered to ensure that the penalty does not have an anti-competitive affect by removing potential competitors from the market, so in industrial law proceedings the financial resources of a contravener must also be considered. There would be a none too subtle irony in the imposition of a penalty which caused an employer to close a business, resulting in:
a)unemployment, a circumstance potentially contrary to two of the principal objects of the WR Act, namely:
i)“encouraging the pursuit of high employment”;[104] and
ii)“protecting the competitive position of young people” and “promoting youth employment”;[105] or
b)non-payment of entitlements.
[104] WR Act, s.3(a).
[105] WR Act, s.3(k).
It therefore appears that the size and financial resources of a contravener are factors to be considered, and the impact of those factors upon the setting of penalty is in each case a matter for consideration of the particular circumstances of the size and financial resources of the contravener, plus the other factors which are relevant.
Co-operation with regulatory authorities
The respondent’s co-operation with regulatory authorities was non-existent prior to the institution of proceedings by the applicant. Even then, it was more than a month before the records requested were provided, and then not all of those records.[106] The respondent engaged a person to look after its employment records. It was to that person whom the applicant was directed when it made the relevant requests for records. It was that person who did not produce the records. The respondent must take responsibility for the actions of the bookkeeper.[107] To the extent that there has been co-operation, it is very belated, and on the evidence available to the Court, “only effectively after they had realised the inevitable,”[108] and as the American romantic writer James Russell Lowell once wrote:
“There is no good in arguing with the inevitable.”[109]
[106] See para.20 above.
[107] Compare El Camino Autos FLR at 41-42 per Keely J; ATPR at 42,239 per Keely J where the Federal Court held that a second-hand car seller was responsible for the conduct of one of its salesmen, which conduct it was unaware of. The conduct was deception in relation to car odometer readings.
[108] Dennington v Prescott & Anor [2008] FMCA 1105 at para.34 per O’Sullivan FM.
[109] J R Lowell, On Democracy (1884). Lowell expressed the same sentiment differently in his essay “On a certain condescension in foreigners”, Literary Essays, Vol.3 (1870-1890): “An umbrella is of no avail against a Scotch mist.”
The mere fact that the contravention has been admitted and a consequent court hearing averted, does not of itself warrant a penalty reduction.[110] More is required, namely:
a)an indication of an acceptance of wrongdoing and a suitable and credible expression of regret; and/or
b)an indication of a willingness to facilitate the course of justice.[111]
[110] Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at 404 per Stone and Buchanan JJ; [2008] FCAFC 70 at paras.73-74 per Stone and Buchanan JJ (“Mornington Inn”).
[111] Mornington Inn FCR at 405 per Stone and Buchanan JJ; FCAFC at para.76 per Stone and Buchanan JJ.
It must not be forgotten that dependent upon the stage at which the contravention is admitted the primary saving may be to the respondent in respect of the unnecessary cost of a contested hearing in circumstances where the applicant has already incurred much of the cost involved in preparation for a hearing, particularly where, as here, in civil proceedings the matter proceeds (or would proceed) on affidavit.[112]
[112] Mornington Inn FCR at 405 per Stone and Buchanan JJ; FCAFC at para.77 per Stone and Buchanan JJ.
In this case there is no expression, credible or otherwise, of regret. There is no apology in evidence and there was no apology sought to be made or put before the Court by Counsel for the respondent. There was no expression of regret or remorse at all. Furthermore, on the evidence, there is little indication of a willingness to facilitate the course of justice, simply a course of action which is, in the Court’s view, more consistent with a bowing to the inevitable than any intrinsic desire to see justice done. Some credit must however be given for the fact that the respondent did not wait until the hearing to admit the contraventions, but did so in the response, which, whilst late, was filed 12 days before the hearing.
The contravener’s contrition
As indicated above,[113] the respondent has not put into evidence any evidence of contrition, and even through Counsel, has not expressed contrition at the hearing.
[113] See para.80 above.
The size of the prescribed penalty, and any recent increases to that prescription
The maximum penalty for each of the contraventions is $5,500 (that is not exceeding 50 penalty units for a body corporate).[114]
[114] See para.30 above.
The more than five-fold increase in the prescribed penalty, as recently as 2006, is a fact to be considered in the imposition of any penalty upon the respondent.[115]
[115] The legislative history of that increase is discussed above: see para.31 above.
The totality principle
The totality principle requires the Court, once it has made a judicial evaluation of what it considers to be an appropriate penalty, to examine one final time, the final penalty in order to determine whether it appears wrong.[116]
[116] Mornington Inn FCR at 397 and 408 per Stone and Buchanan JJ; FCAFC at paras.42-43 and 91 per Stone and Buchanan JJ; Australian Ophthalmic Suppliers Pty Ltd v McAlary-Smith [2008] FCAFC 8 at paras.27-28 per Gray J and para.78 per Graham J.
Assessment of penalty
Although there are two separate contraventions the Court does not consider it appropriate to treat the respondent as a second time offender in relation to the second contravention concerning the 4 March 2008 Request for Records. So in relation to both contraventions the respondent will be treated as a first time offender, and in that respect it is appropriate to reduce penalty by an amount of 20% to 30%.
Given that the evidence discloses that co-operation with the regulatory authorities was minimal, and that there is no expression of contrition, a reduction of not more than 10% can be justified on the basis of the limited co-operation belatedly afforded to the regulatory authorities.
The Court notes that whilst the conduct was deliberate, the applicant accepts that it was not intentionally deliberate, but recklessly deliberate. Further, whilst the contraventions were contrary to the objects of the WR Act and the purposes of the WR Regulations the contraventions were not in the most serious category of cases. Further, such evidence as there is available as to the size of the Business would tend to indicate that any penalty ought not be unduly onerous. The Court notes that there is effectively no evidence as to the financial resources of the Business or the company which is actually the respondent. In all the circumstances a further penalty reduction in the order of 20% to 25% is appropriate having regard to the seriousness of the contraventions and the size of the Business.
In determining the final amount of penalty the Court takes account of the need for specific and general deterrence. In terms of specific deterrence the Court does not consider that the respondent requires significantly greater than normal specific deterrence, but notes the failure to express contrition, and the lack of co-operation over a significant period of time with concern. In terms of general deterrence the case does not require anything other than the ordinary general deterrence.
In circumstances where the Court considers that a penalty reduction within the range of 40% to 65% is within contemplation, taking into account all of the factors above, the Court considers that a reduction of 55% is appropriate. On that basis a penalty of $2,475 for each contravention would be imposed, making a total of $4,950 for both contraventions.
Looking at the penalties in their totality the Court is of the view that they might arguably be a little high in all of the circumstances. That is the Court’s instinctive assessment looking globally at the penalties. The Court considers that a more appropriate total of penalties would be $4,500, that is $2,250 for each contravention.
Conclusion and orders
For the reasons set out above there will be declarations that the respondent contravened ch.2 reg.19.18 of the WR Regulations in respect of the 18 February 2008 Request for Records and the 4 March 2008 Request for Records. In respect of each contravention a penalty of $2,250 will be imposed.
I certify that the preceding ninety-one (91) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: Sandra Gough
Date: 31 October 2008
37
9